*Says Nigeria must work towards import substitution

*Nigeria’s foreign reserves rises by $2.89bn, stands at $32bn -CBN gov

By Henry Umoru & Joseph Erunke

ABUJA—THE Senate yesterday asked the Central Bank of Nigeria, CBN to as a matter of urgency go after some companies to recover the over N30 billion of waivers given by the Federal Government channeled towards the importation of rice, just as it urged the apex bank to ensure that all agencies of government remit money into the Federation account.

Speaking yesterday when the Governor of Central Bank of Nigeria, CBN, Godwin Emefiele led other management team of the bank to honour the Senate’s invitation, Senate President Bukola Saraki instructed the CBN to go after the Customs Service to recover the money given as waivers to these companies, even as he stressed the need for the review of the Customs Act for effective performance when the Senate resumes plenary.

The Senate President said, “We must also show the big signals in things that we bring out the success of this policy, for example, you brought to our notice, the issue of the waivers on taxes and duties especially on rice which is about N30bn that were granted to certain companies, this money must be paid back to the federal government. We have mentioned this to the governor of Central Bank. It will be our resolve too after we resume to get the Nigerian Customs act on this.

“Even before that, we cannot be taking some of these top positions while some people will get away and will not pay what they are supposed to pay what they should return to government. We have told the governor of Central Bank of Nigeria as well, he should also go and collaborate with customs to ensure that this N30 billion come back to the government coffers, so that we will be seen to be doing things to make this policy successful.

Meanwhile, the CBN governor, Godwin Emefiele told the Senators yesterday that the External Foreign Reserves Nigeria’s Foreign Reserves has since the coming on board of President Muhammadu Buhari risen by 2.89 billion dollars and as at July 7, the External Reserves stood at 31.89 billion dollars, adding that Inflation rose from eight percent in December 2014 to nine percent in May, 2015.

According to Emefiele, following the sharp fall in oil prices and speculative foreign exchange activities, the external reserve declined from $37.3 billion in June 2014 to $29.1 billion at the end of June of 2015, adding, “Headline inflation remained stable throughout the year, although it has crept up to the upper limit of Central Bank range of 69 percent. Import prices inflation rose to 8.9 percent. Inflation rose gradually to eight percent in December 2014 to nine percent in May, 2015. Reflecting the sharp fall in oil prices and speculative foreign exchange activities, the external reserve declined from $37.3 billion in June 2014 to $29.1 billion at the end of June of 2015.

CBN Governor, Mr Godwin Emefiele

“I am delighted to note that with the strong efforts of President Muhammadu Buhari, to block all leakages as well as the Vigilant Demand Management Strategy of the Central bank of Nigeria, we have seen our foreign exchange reserve begin a gradual recovery.

“As at the 7th of July, 2015, the reserve stood at $31.89 billion, a trend we find extremely gratifying. Given our understanding that a fall in oil prices transitory but permanent, and that some speculative activities were ongoing in the foreign exchange market, the CBN took a number of proactive actions. These include: (1) Further typing of monetary policy, closure of the official foreign exchange window, review of operators’ net open position, placement of 72-hour limit on foreign exchange utilization by customers, introduction of a two-way other based quota system, introduction of a bank-around CBN tentative rate and bank on selective items from assets to foreign exchange.”

Speaking further, Senator Saraki who frowned at the issue of smuggling, said that no matter how good the nation’s policy on import substitution may be, it will not succeed if smuggling continues to be the order of the day, adding that the big smugglers that are well known, must be stopped through serious action of government, adding , “Secondly is the issue of smuggling, because no matter how good, this policy on import substitution looks, if smuggling can still be going on the way it is now, this policy will not be successful. That area as well, especially the big smugglers that are well known, it is time that this action is taken to stop it.”

“Thirdly, is about all other items too that fall under agriculture that we can produce locally, must be reviewed. We also stressed the need to also continue to work closely with the CBN by meeting regularly to review the policy so that we can look at the effectiveness of the policy. The key issue is also, fiscal discipline, we can not de emphasise on it. The CBN must know those agencies of government that had in the past, not sending revenue straight to the consolidated revenue purse and you must play a role in ensuring that this is done because a lot of agencies are used to this act of impunity and it is the time that we must play a role that these agencies bring the money back.

“We have seen that there is a slight increase in the amount in the foreign reserves due to the level of fiscal discipline and this must be sustained. Also, there must also be a participation of other organs like the Ministry of agriculture, trade and investment because the CBN alone cannot push this without the cooperation of other organs.